MagicJack VocalTec Stock Pops, Mobile App Users Rise

MagicJack VocalTec's (CALL) stock popped Thursday after the Internet calling provider late Wednesday reported Q4 EPS and revenue that fell from a year earlier but beat analyst views. The company also announced an expansion of its retail distribution.

MagicJack said Q4 profit fell 42% from the year-earlier quarter, to 69 cents per share. Revenue fell 8% to $38.2 million, but that's up 7% from Q3.

The company forecast 2014 revenue of $158 million to $163 million, above analyst expectations of $142 million. It posted sales of $143 million in 2013.

With Thursday's gain, the company's stock has shot up nearly 75% in 2013.

"Management is halfway through a restructuring that is completely changing its marketing, pricing and distribution to focus on wireless," Oppenheimer analyst Tim Horan wrote in a research report. "In Q2, the company will release an updated version of its mobile app as well as a new magicJack device, and will launch integrated international/value-added voice services. This is the reason for the strong guidance that remains above our increased estimates."

The company said it added 1.3 million mobile app users in the December quarter, bringing its total to 6.9 million. Horan says MagicJack VocalTec needs to move faster into mobile messaging, like WhatsApp, acquired by FaceBook (FB) recently for $16 billion.

"We believe that this new management team can execute and is taking the right steps, but we think the stock will be range bound until we see cash revenue growth," Horan said.

MagicJack VocalTec's (CALL) stock popped Thursday after the Internet calling provider late Wednesday reported Q4 EPS and revenue that fell from a year earlier but beat analyst views. The company also announced an expansion of its retail distribution.

MagicJack said Q4 profit fell 42% from the year-earlier quarter, to 69 cents per share. Revenue fell 8% to $38.2 million, but that's up 7% from Q3.

The company forecast 2014 revenue of $158 million to $163 million, above analyst expectations of $142 million. It posted sales of $143 million in 2013.

With Thursday's gain, the company's stock has shot up nearly 75% in 2013.

"Management is halfway through a restructuring that is completely changing its marketing, pricing and distribution to focus on wireless," Oppenheimer analyst Tim Horan wrote in a research report. "In Q2, the company will release an updated version of its mobile app as well as a new magicJack device, and will launch integrated international/value-added voice services. This is the reason for the strong guidance that remains above our increased estimates."

The company said it added 1.3 million mobile app users in the December quarter, bringing its total to 6.9 million. Horan says MagicJack VocalTec needs to move faster into mobile messaging, like WhatsApp, acquired by FaceBook (FB) recently for $16 billion.

"We believe that this new management team can execute and is taking the right steps, but we think the stock will be range bound until we see cash revenue growth," Horan said.

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